Costco's popular Kirkland Signature diapers are switching manufacturers, moving from Kimberly-Clark to First Quality as the latter seeks to establish a stronger presence in the private label market.
Kimberly-Clark's strategy shift to focus on higher-margin branded products reflects an industry-wide trend as companies aim to restore profit margins to pre-pandemic levels.
According to Kimberly-Clark's CFO, the company's exit from private label businesses will allow it to focus on its own brands and improve differentiation in a competitive market.
As inflation affects consumer spending, Costco's private label products like Kirkland Signature diapers provide shoppers with perceived better value compared to name-brand alternatives.
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